2 Summary Today s policy makers are facing the challenge of mitigating climate change without limiting the growth potentials of developing countries. In this vein, this study offers a step towards answering the question is de-carbonized development possible. Particularly, we investigate household emissions and the potential diffusion of renewable energy in developing countries. This study contributes to the literature in four main points. First, it investigates household carbon emissions from a developing country s perspective and analyzes the influence of rising income on emissions while controlling for households socio-demographic characteristics. Second, it explores other relevant factors such as carbon intensity and energy intensity that could influence rising emissions. Third, it examines how unequal the households are in their emissions. Emission inequality has direct implications towards reducing household carbon emissions. Lastly, this study investigates the potential diffusion of various sources of renewable energy in developing countries. Renewable energy appears to be a feasible approach in reducing carbon emissions. It can help fuel growth in developing countries without further aggravating the alarming concentration of green house gas emissions accumulated in the atmosphere. The first essay aims to answer the question, how carbon intensive is the lifestyle of Philippine households and investigates the possibility of delinking affluence and household emissions. We estimate household carbon emissions embodied in various consumptions of goods and services by combining input-output analysis with household expenditure for 2000 and Based on the estimation, expenditures related to fuel, light and transportation are the most carbon intensive goods consumed by households while nondurable goods are the least carbon intensive. Key results show that while households socio-demographic characteristics matter in explaining emissions, we found no concrete evidence on delinking household affluence and emissions. Unless consumption patterns changes, it is likely that Philippines households will lead a carbon intensive lifestyle, as households get richer. The second essay decomposes the changes in household emissions and investigates other relevant factors such as carbon intensity and energy intensity that could influence household emissions. While the first paper points out the strong correlation between emissions and income, decomposing the change in emission shows that this correlation varies across household distributions. The income effect is more pronounced among poor households while the energy intensity effect is more pronounced among rich households. This suggests that improving energy intensity can be a feasible option in reducing household emissions, in particular, promoting the use of energy efficient household appliances, and use of fuel-efficient cars or access to improved public transportation. If aiming to reduce household carbon emissions, then it is necessary to examine how unequal the households are in their emission levels. Any climate mitigation policies aimed at reducing emissions has a more pronounced effect in a more equal society than in an unequal one. 2

3 Results show that there is a high and rising emission inequality among households and a bigger portion of the emission inequality is explained by energy intensive household consumption such as fuel, light and transportation. This suggests that for targeting purposes policy makers should focus on these energy intensive consumptions if aiming to control household emission inequality. The first three essays highlight that a large share of the total household carbon emissions is due to energy intensive consumption. This suggests that shifting of energy sources to emissionneutral sources such as renewable energy is crucial in maintaining or improving household lifestyle without contributing to further increases in global emissions. Hence, for the fourth essay we model the potential diffusion of various sources of renewable energy in developing countries and investigate its determinants. We focus on diversification because most renewable energy rely on the weather as its main source and these sources are unpredictable but diversification can allow for a steady and reliable supply of energy. Results show a robust nonlinear effect of income on diversification depicting a U-shape kind of relationship. In addition, without relying on foreign direct investments and development assistance, we find that developing countries with technological advances, skilled human capital, developed financial markets, sound governance and greater renewable energy potential can move to diversification of renewable energy sources. We also document a wider diversification of renewable energy sources since the adoption of Kyoto Protocol in the late Based on the evidence presented above the following policy implications can be drawn. On the household side, while it is unlikely that households will lead a low carbon lifestyle as they become more affluent and imposing restrictions on what households can consume is difficult and controversial, taxing carbon intensive goods can be an option if aiming to control household emissions. However by doing this, policy makers should be cautious not to jeopardize the efforts in reducing poverty in the Philippines where a quarter of its population lives below poverty line. Several other options are also possible in curbing household carbon emissions. These include improving production efficiency and changing consumption patterns to less carbon-intensive lifestyles and in particular, improvements in access to efficient public transport, to energy efficient lighting and cooling technologies. In addition, increasing use of renewable energy sources and integrating renewable energy in developing countries energy mix is an important policy agenda to help decouple economic growth with emissions. 3

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